The struggle called student income limit

121279-119573Every year, thousands of students have to keep accurate calculations about their annual income. Or if they don’t do that, it might backfire, because if the student income is higher than the income limit allows it to be, the part of the student allowance must be paid back with an interest rate of 15 percent. It is a total rip off, because the interest rate is much bigger than the interest rates of mortgage loans for example. If the student has to return one thousand euros of student allowance, they have to pay extra 150 euros as a ‘punishment’ for not keeping an eye on their incomes. However, it is possible to prevent this recovery of student aid by cancelling it in advance. Also by returning the part of student aid that goes over the limit before the end of May the following year, it is also possible to avoid the reimbursement with interests. (, 2016.)

Most students take out the student allowance for nine months, because in the summer, students don’t usually study. So, for nine months the income limit is set to 11 850 euros, which basically means that you can earn 1316,67 euros per month before taxes. The income limit is divided into two categories. The first is the limit that you can earn for the month that you have been paid a study grant and housing supplement or both, which is 660 euros before taxes. The second one is for the summer months that you don’t get study grant or housing supplement which is 1970 euros per month before taxes. The total of these is the 11 850 euros which was mentioned earlier. (Kela, 2016.)

Keeping your annual income under these government set income limits is a real struggle for many students. I work for 15 hours per week myself and every year when the year is coming to an end, I have to speak with my superiors about cutting down my working hours, because the income limit is about to be surpassed. Luckily I have understanding superiors at my workplace and they let me do less hours at the end of the year, but that is not necessarily the case with everyone.

So what is the point of keeping these income limits? That is a hard question to answer from a student’s point of view. One argument for this is that by keeping the income limits, students would mainly concentrate on studying and they would graduate on time. But that argument is not a very good one, because in order to get the student allowance, the student must get at least 20 course credits per semester even if the student takes only one month of student allowance. If the student takes nine months of student allowance, they must get five course credits per month which means 45 credits. (Kela, 2016.) So that alone is a guarantee that student concentrates mainly on studying.

Another rationalization for the present income limit is that only the students who really need the allowance are able to get it. Not the ones that earn ‘too much’ money while studying. (, 2014.) Even though this argument makes more sense than the previous one, the fact is that the income limit is too low. In comparison to other Nordic countries, only Iceland has lower income limit for students who need financial aid. Students are allowed to earn 16 500 – 19 500 euros per annum without any effect on their eligibility for financial aid in other Nordic countries. (Helsinki Times, 2014.) The current income limit rule makes it very hard for students to earn and save money for the future.

“In the year 2011 Finnish student union made a calculation in co-operation with Social Insurance Institution of Finland (better known as Kela) that showed that by removing the income limit it would cost approximately 300 million per year to the society”, wrote politician Tommi Liinalampi from Vihreät political party on his column in New Finland-webpages. This is the real reason why income limits even do exist and I think that we can all agree that removing the income limit isn’t a good solution for this problem. However, something has to be done, because clearly the system isn’t working, if it’s not possible to work two or three times per week without surpassing the limit.

There is one sentence I thought I would never even hear, is the one I now use regularly and it is “Sorry, I can’t do Sundays, because I will earn too much money.” Another thought that got me thinking was when my friend said that “I hope that my bonus holiday pay isn’t too much so that my calculations don’t get messed up.” These two sentences show just how students have to struggle, because of the tight income limit.  If the income limit was higher, I would definitely work for more hours and on Sundays also, while concentrating on my studies the same way as I do now.

There are, and always will be different opinions about how this problem should be solved. Some might think that the student income limit should remain the same and others want to remove it completely. Nevertheless, I think the solution for this problem, should be raising the income limit and dropping the interest rate when a student has to payback financial aid to Social Insurance Institution of Finland. Our society should award hard-working students rather than by giving a fine for working too much.


Helsinki Times, 2014. Kela: Finnish student aid the lowest in Nordic countries. Helsinki Times [Online] Available at: (11.10.2016.) 2014. Opintotuki ”rankaisee” siitä, että opiskelija nostaa tukea, vaikka ei sitä tarvitse. Ilpo, Lahtinen. Kelan pääsuunnittelija. HS [Online] Available at: (11.10.2016.) 2016. Ylittyikö tuloraja? Opiskelija, laske kesätienestisi viimeistään nyt. HS. [Online] Available at: (09.10.2016.)

Kela. 2016. Financial aid for students income. Kela [Online] Available at: (09.10.2016.)

Kela. 2016. Opintojen edistyminen. Korkeakouluopinnot. Kela [Online] Available at: (09.10.2016.)

Liinalampi, Tommi. 2016. Opintotuen tulorajojen poisto kallis ratkaisu. Uusi Suomi [Online] Available at: (11.10.2016.)

This entry was posted in Personal finance, Uncategorized. Bookmark the permalink.

3 Responses to The struggle called student income limit

  1. santeripischow says:

    I couldn´t agree more with you that income limits must be increased. A nice blog about an interesting topic!

  2. alisaem says:

    Really great topic, good solutions to the problem on hand.

  3. onnipe says:

    Fabulous text, I agree with you. Income limits are absolutely too low.

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